Maintenance of Inventory Methods
Two sets of records for materials received issue or transferred are generally maintained. They are:
1. Records by the storekeeper
Bin means a rack, container or space where goods are kept. The store is fitted with serially numbered bins, each meant for a particular type of material. A card (known as Bin in Stock card) is placed outside each bin and, whenever the materials are received or issued a notation is made on the card. Each bin card also contains particulars regarding maximum, minimum and ordering levels, code number, and description etc. of the materials kept in the bin. The bin cards assist the storekeeper to control the stock as they provide a continuous record of stock on each bon.
Stores materials control record
Stores materials control record is usually an alternative to bin card. The disadvantage of the system of maintaining bin cards is that the storekeeper does not have all details of materials close at hand. He will have to go to the appropriate bin to find out details about a particular type of material. This particularly inconvenient in case of a large store where various types of raw-materials and spare parts of mechanical equipments are stocked in large quantities. Store transactions will also be numerous and thus making it pretty difficult for the storekeeper to record each transaction on the bin cards as and when occurred. In case of stores material control record the storekeeper has all details close at hand. It is written up in loose-leaf book or card file. The storekeeper notes in it such information as quantities ordered, probable requirements for particular contracts etc. besides such details which are entered in bin cards. In some big concerns the bin cards as well as stores material control record are maintained simultaneously.
2. Records by the costing office
The cost office maintains a stores ledger in which a separate account is opened for each kind of materials and spare parts stocked in store. It is generally maintained in the form of loose-leaf cards because they can be removed and inserted in the ledger conveniently. One card is allotted to each item of materials.
Entries made from Goods received reports, invoices, materials requisition slips and materials returned notes. Entries made in the stores ledger are identical to those on bin cards except that money values are also shown in the ledger.
The store staff should have no connection with the writing up of the stores ledger otherwise it will fail to impose an internal check upon the stores staff to maintain accurate store record.
The ruling of the stores ledger, of course, be modified to suit the requirements of a particular class of business or industry.
To maintain adequate control on both direct and indirect materials it is necessary that stores ledger should be kept on the “perpetual inventory system”, followed by “continuous stock-taking”. These two terms have been explained below while explaining inventory systems
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